Hunger Rises with Food Prices

Brandon Sun “Small
World” Column, Sunday, March 20 / 11Zack
Gross

About one billion people, 14 per cent of the world’s population, are currently undernourished, a nice word for hungry.

The
current economic crisis, the continuing ineffectiveness or
unwillingness of our “globalized” system to deal with hunger and
climate change, and today’s quickly rising oil prices due to mid-East
conflict are fueling not only higher, but also more unpredictable, food
costs.

Many staple foods have jumped in price over the past
year: corn (75%), wheat (85%), sugar (77%) and cooking oil
(57%). These prices last jumped in 2007-08, causing riots around
the world, and have remained high.

Rice, meat and dairy
products, while holding at past levels so far this year, are still
stuck at the high 2007 levels. Overall, the food price index,
says the UN Food & Agricultural Organization (FAO), is up 3.4% for
the past quarter, the highest ever recorded quarterly increase.
This past February was the eighth consecutive month that prices rose!

Prices
are also going up in Western countries, 10% per year in Britain and
Europe, for instance. The UN expects that developed countries
will see overall food prices rise by 40% over the next decade.
This puts the poor in our part of the world at greater risk.

Among
the usual victims of food price increases globally are women and
children. They are the most vulnerable, especially in more
traditional societies where men get first options. Increased
poverty means children don’t go to school, creating a cycle of poverty
into the future.

Reduced production due to inclement
weather (climate change) has been combined with increased, even panic,
buying because of natural disasters such as floods, earthquakes and
droughts (in Australia, Eastern Europe, New Zealand and East Africa),
thus exacerbating price rises.

Land lost due to the
growth of biofuel production has also meant less food available,
especially meat. Increased oil prices mean increased cost of
chemical fertilizers and transportation.

But, the big food
trading companies are reporting growing profits, raising questions of
speculation and profiteering in the marketplace. One might think
that poor farmers around the world would improve their livelihoods via
higher prices. However, the poor are not in control of the
system. They are also paying more for what they need and are
getting less than what they deserve.

“Smallholders” sell their crops most often to single buyers who offer very low pay.

When
we purchase a food item, very little is returned to the producer.
Most goes to transportation, processing, packaging, advertising,
“middlemen” and corporate profit.

Peasants have limited
access to land and water, pay top dollar for fertilizers and
implements, and have no benefits or labour rights.

When the
market price of food jumped three and four years ago, the UN and other
“experts” blamed the usual causes, as outlined above, as well as the
switch, particularly in now economically strong China to eating more
meat.

When evidence of hoarding by merchants surfaced,
food riots ensued in twenty countries, forcing their governments to ban
food exports and heavily subsidize staples for their people. (The
current violence and government change in the Middle East is thought to
be evidence of this process taking place all over again!)

Now,
however, economists are more comfortable blaming speculators.
Really no different than the speculation that led to the current
economic collapse and the prosecution of financiers particularly in the
US, lobbyists for deregulations pushed food commodities into the same
category as oil, gold and metals. This has led to distortions
where food prices are more volatile than ever.

The
British newspaper, The Guardian, states: “When hedging was
tightly regulated, it worked well enough. In a bad year, Farmer X
got a good return but in a good year Trader Y did better. The
price of real food on the real world market was still set by real
forces of supply and demand. Now, commodity hedging is 70 to 80%
speculation.”

As an example, the London hedge fund Armajaro
bought a quarter of a million tonnes of cocoa beans, more than 7% of
world stocks, in 2010, helping to drive chocolate to its highest price
in thirty-three years. Similarly, coffee prices went up 20% in
three days due to hedge fund speculation.

“People die from hunger while the banks make a killing from betting on food,” says Deborah Doane, director of the World Development Movement in London, England.

The
question is: Is food a right or a privilege? Should the
price of food be the result of banks rolling the dice to see how much
they can make?

As well, we need to take action on the
climatic and governance issues that affect price, such as global
warming, democratic development and civil and regional conflict.